Fed Funds Projected to Open at 0.07% to 0.10%, ICAP Says

Dec. 13 (Bloomberg) -- Fed funds, the U.S. overnight inter-bank lending rate, is projected to open in a range of 0.07
percent to 0.10 percent, within the Federal Reserve’s target of
zero to 0.25 percent.

Fed funds closed at 0.01 percent yesterday after trading
from 0.01 percent to 0.15 percent and averaging 0.07 percent,
ICAP Plc, the world’s largest inter-dealer broker, said in an e-mailed statement. ICAP’s monthly average is 0.078 percent.

No open market operations, which add or drain reserves to
the banking system, are expected, according to Wrightson ICAP, a
research unit of ICAP specializing in U.S. government finance.

In repos, the Fed buys U.S. Treasury, mortgage-backed and
agency debt from its primary dealers for a set period,
temporarily raising the amount of money available in the banking
system. At maturity, the securities are returned to the dealers,
and the cash to the Fed. In reverse repos, temporary funds are
drained from the system.